Legal Challenge to Paper Bag Charge

South Carolina plastic bag manufacturer Hilex Poly has filed a lawsuit against Los Angeles County claiming they violated Proposition 26 when requiring a retailer retained 10-cent charge on paper bags.

Proposition 26 was passed by the voters in early November, 2010, and requires local governments to place a tax increases before the voters for a 2/3 vote for passage. In late November, 2010, Los Angeles County passed their bag ordinance which bans the use of plastic carryout bags and requires a 10-cent charge on paper carryout bags.

The lawsuit by Hilex Poly essentially claims the retailer retained paper bag charge is technically a “tax” under Prop. 26. Los Angeles County attorneys, along with attorneys from several other jurisdictions, declared Prop. 26 did not apply to the charge before the Board of Supervisors voted for the ordinance.

If Hilex Poly wins this case the result could mean local governments could no longer require a retailer-retained charge on a bag without bringing the question to the voters.

Many thought a Prop. 26 lawsuit of this type would be filed before the ordinance went into effect this past July. The Los Angeles County ordinance along with several other ordinances have been in effect for months now.

It is worth noting this lawsuit comes on the heels of the plastic bag industry’s loss in the Manhattan Beach case where they tried to require jurisdictions perform expensive environmental reports before passing an ordinance.

The filing of this lawsuit appears to have no immediate effect on the implementation of the Los Angeles County ordinance. Los Angeles County will notify stores if there is a change in legal requirements. Companies with affected stores are urged to confirm with Los Angeles County before making any changes.

PR Newswire article is available here.